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1 IN THE SUPREME COURT OF THE

2 ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ x

3 PAULA PETRELLA, :

4 Petitioner : No. 12­1315

5 v. :

6 METRO­GOLDWYN­MAYER, INC., ET AL. :

7 ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ x

8 Washington, D.C.

9 Tuesday, January 21, 2014

10

11 The above­entitled matter came on for oral

12 argument before the Supreme Court of the United States

13 at 11:06 a.m.

14 APPEARANCES:

15 STEPHANOS BIBAS, ESQ., Philadelphia, Pennsylvania; on

16 behalf of Petitioner.

17 NICOLE A. SAHARSKY, ESQ., Assistant to the Solicitor

18 General, Department of Justice, Washington, D.C.; for

19 United States, as amicus curiae, supporting

20 Petitioner.

21 MARK A. PERRY, ESQ., Washington, D.C.; on behalf of

22 Respondents.

23

24

25

1 Alderson Reporting Company Official

1 C O N T E N T S

2 ORAL ARGUMENT OF PAGE

3 STEPHANOS BIBAS, ESQ.

4 On behalf of the Petitioner 3

5 ORAL ARGUMENT OF

6 NICOLE A. SAHARSKY, ESQ.

7 For United States, as amicus curiae, 16

8 supporting the Petitioner

9 ORAL ARGUMENT OF

10 MARK A. PERRY, ESQ.

11 On behalf of the Respondents 27

12 REBUTTAL ARGUMENT OF

13 STEPHANOS BIBAS, ESQ.

14 On behalf of the Petitioner 56

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2 Alderson Reporting Company Official

1 P R O C E E D I N G S

2 (11:06 a.m.)

3 CHIEF JUSTICE ROBERTS: We will hear

4 argument next in Case 12­1315, Petrella v.

5 Metro­Goldwyn­Mayer.

6 Mr. Bibas?

7 ORAL ARGUMENT OF STEPHANOS BIBAS

8 ON BEHALF OF THE PETITIONER

9 MR. BIBAS: Mr. Chief Justice, and may it

10 please the Court:

11 This Court has never applied to

12 constrict a federal , and rejected

13 such a claim just four years ago. Laches cannot bar

14 these claims for four reasons.

15 First, under the separate accrual rule,

16 these claims are timely. Respondents committed these

17 discrete wrongs from 2006 on, but would use Petitioner's

18 failure to challenge earlier wrongs to foreclose these

19 later claims before they even arose.

20 Second, laches is a gap filler, but Congress

21 filled this gap with a bright­line statute of

22 limitations. Third, Congress chose a clear, predictable

23 timeliness rule. And fourth, injunctive relief must

24 remain available to protect Petitioner's property right

25 against ongoing violations, lest Respondents effectively

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1 get a compulsory license for free for the next four

2 decades.

3 JUSTICE SCALIA: Let's ­­ let's take your

4 second point. What a statute of limitations says is not

5 that you are ­­ are scot­free within the statute of

6 limitations period. It simply is a negative. It says

7 you can't be sued beyond that, right?

8 MR. BIBAS: Yes. The wording of the statute

9 of limitations ­­

10 JUSTICE SCALIA: So it seems to me there is

11 nothing ­­ if ­­ if we adopted the position of the other

12 side, there's nothing that would cause the statute of

13 limitations to be frustrated.

14 MR. BIBAS: This is not purely about the

15 text, but about the background principle of that

16 laches is. Laches domain was as a gap filler where

17 there was no ­­ no timeliness rule. Congress has

18 occupied the field with a timeliness rule here and

19 displaced it.

20 That's why laches developed in equity to

21 compensate for the absence of limitations periods.

22 JUSTICE SCALIA: Yes, but it continued to be

23 used in equity, even when there were limitations period,

24 didn’t it? It may have started that way, but that was

25 certainly not its only use.

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1 MR. BIBAS: Not where there was a binding, a

2 Federal one. Where there was an analogous one that was

3 borrowed loosely from a State in diversity, Federal

4 courts understood themselves to have flexibility to vary

5 from the State limitation period because it wasn't

6 Federal law.

7 JUSTICE SCALIA: Well, it was Federal law.

8 Federal law adopted it. It was Federal law.

9 MR. BIBAS: This was in the pre­Erie days,

10 where there was understanding that there was a

11 general Federal , an equity, that those cases

12 were decided, that ­­ this court in Holmberg v.

13 Armbrecht understood this almost as a Chevron­type

14 argument.

15 Has Congress spoken to the timeliness issue?

16 If yes, Holmberg says the congressional statute is

17 definitive. If not, Holmberg says, then its silence

18 delegates the matter to, quote, "judicial implication."

19 And then there's some judicial flexibility

20 on timeliness issues. There's no question that

21 non­timeliness doctrines can cut claims off within the

22 limitations period, but not the timeliness doctrine of

23 laches.

24 JUSTICE ALITO: Should we see anything in

25 the particular way this provision is worded? It says,

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1 "No civil action shall be maintained under the

2 provisions of this unless it is commenced within 3

3 years after the claim accrued."

4 It doesn't say, "Any civil action may be

5 maintained if it is commenced within 3 years after the

6 claim occurred."

7 MR. BIBAS: Yes, Your Honor. That's why ­­

8 JUSTICE ALITO: So it doesn't ­­ you know,

9 it says ­­ it says you can't do it, unless it's within

10 three years, but it doesn't say that, if it's within

11 three years, you’re home­free.

12 MR. BIBAS: Yes, Your Honor. That's why I

13 said it's not strictly a textual argument. It's about

14 the domain of laches and the congressional understanding

15 of limitations periods. That's what ­­ how this Court

16 read them in the Ledbetter case. If I might quote, "A

17 freestanding violation may always be charged within its

18 own charging period, regardless of its connection to

19 other violations."

20 We repeated the same point more recently in

21 Morgan. Quote, "The existence of past acts and the

22 employee's prior knowledge of their occurance...does not

23 bar employees from filing charges about related discrete

24 acts, so long as the acts are independently

25 discriminatory and charges addressing those acts are

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1 themselves timely filed."

2 This Court's understanding in Morgan and in

3 Ledbetter was the period is to remain open and

4 timeliness doctrines are not to cut them short because

5 those doctrines, such as laches, are where there isn't a

6 binding congressional statute of limitations.

7 JUSTICE BREYER: Why, by the way ­­ I mean,

8 I guess the ones that increase the statute of

9 limitations, do they apply, too? It doesn't say

10 anything about them.

11 MR. BIBAS: The timeliness doctrines of

12 and the rule are distinguishable.

13 This Court understands that when Congress ­­ tolling and

14 discovery rules developed in order to interpret

15 limitations periods. You cannot have a tolling or

16 discovery rule without a limitations period to

17 interpret.

18 So this Court has said it's an accoutrement.

19 It's intertwined with interpreting the word "accrues,"

20 for a discovery rule, or interpreting "3 years." Do you

21 count the period of infancy? Do you count Saturdays or

22 Sundays? It interprets the statute of limitations.

23 JUSTICE BREYER: Can I just take exactly

24 your words, and I fill in, instead of "tolling,"

25 "laches"? So?

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1 MR. BIBAS: Tolling has always been used ­­

2 JUSTICE BREYER: Yes, yes, yes. All right.

3 But I mean, now, what you're talking about is custom.

4 You're not talking about language.

5 MR. BIBAS: Right.

6 JUSTICE BREYER: Because the language sounds

7 to me like the same. And so then I'm obviously going to

8 ask you if the court ­­ courthouse burns down or

9 fraudulent concealment or ­­ you know, there are dozens

10 of ­­ not dozens, but there are quite a few such

11 doctrines.

12 And why would we apply those and not apply

13 the shortening ones, too.

14 MR. BIBAS: Well, first, briefly,

15 Respondents concede there are no words in this Act that

16 even give a toehold for laches. But second, the state

17 of the law in 1957 and to this day is that tolling and

18 discovery rules were long background periods for

19 interpreting limitations rules. Laches has never been.

20 This Court ­­

21 JUSTICE SCALIA: But they originated in

22 equity, just as laches did. The tolling rules

23 originated in equity. They were brought into law. What

24 troubles me about this case is this: Did the adoption

25 of the new Rules of Federal Procedure disable courts

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1 from bringing over anything else from equity into law?

2 Tolling used to exist. It was brought over

3 into law before the new Rules of . And

4 therefore, you would not be altering any substantive

5 right to continue to apply that tolling rule.

6 Your argument here is ­­ is that to apply

7 laches is to alter a substantive right, and therefore,

8 under the ­­ under the Rules Enabling Act is not

9 allowable.

10 My question is this: Do you think that the

11 Rules Enabling Act prevented courts from doing what they

12 had in the past? That is, not using the Act as the

13 means of saying everything that was in equity is now in

14 law, but rather sitting back and thinking ­­ you know,

15 here's another part of equity that should be brought

16 over into law, not because the Act says so, but because

17 we think it ought to be, just as we thought, 50 years

18 ago, the tolling ­­ the ­­ the tolling provision should

19 be brought over into law.

20 Have courts been ­­ been disabled from doing

21 that by reason of the Act?

22 MR. BIBAS: Yes, not only the words of

23 Section 2072(b) that you may not "enlarge, abridge, or

24 modify any substantive right," but this Court's holding

25 in Grupo Mexicano recognized that the historical limits

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1 on equitable remedies are limited to where they were at

2 the times ­­

3 JUSTICE SCALIA: But it says, "The rules

4 shall not alter or amend any substantive right." And

5 what I'm saying is it isn't the rules that do it. It's

6 just we have made the independent justification that

7 this ancient rule, which was applied in equity, ought to

8 be applied in law as well.

9 MR. BIBAS: I point to this Court's having

10 repeatedly rejected that extension in Mack and then

11 Russell and Holmberg and Oneida and Merck just 4 years

12 ago. This Court has repeatedly said laches cannot

13 shorten the statutes of limitations, it's not

14 applicable, especially since ­­

15 JUSTICE SOTOMAYOR: Could you ­­ do you have

16 to accept Justice Scalia's premise that the Court, in

17 all areas, is deprived of that right? Can you

18 concentrate on your ­­ your arguments why, in this

19 particular Act, even if we had the option, we shouldn't

20 exercise it?

21 MR. BIBAS: Yes, Your Honor. I think it's

22 very salient that this is the Copyright Act, an Act with

23 detailed statutory safeguards against financial and

24 evidentiary prejudice. Moreover, copy ­­ the copyright

25 is a property right registered with the government with

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1 a clear registry that wants clear, simple, predictable,

2 easy­to­apply rules, as the policy of the '76

3 Copyright Act.

4 And this Court's case law, in the trademark

5 context from the late 19th century, says, when we're

6 dealing with a property right that extends into the

7 future, injunctive relief has to remain available to

8 vindicate that property right, unless there is something

9 that rises to the level of a distinct , an

10 abandonment or an .

11 But the ­­

12 JUSTICE SOTOMAYOR: You see, counselor, this

13 is my problem. And ­­ and I sort of disagree with you

14 fundamentally because I don't know that you're entitled

15 to injunctive relief, but you might be entitled to a

16 compulsory license.

17 And by that, I mean you have ­­ this is the

18 government's position, and maybe I'm arguing for it, the

19 government says you might be entitled to payment for the

20 use of your copyright because it belongs to you and

21 there shouldn't be some right that

22 the other side gets.

23 But in terms of injunctive relief, given

24 their reliance on your failure to act for 18 years, they

25 shouldn't be put out of business and told that they

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1 can't continue in their business.

2 And so that's the kind of policy I'm talking

3 about, which is break down the remedies and tell me ­­

4 I'm more moved by the fact that someone could take over

5 your copyright than I am by your injunctive relief

6 argument.

7 MR. BIBAS: Yes, Your Honor. You're correct

8 that the Copyright Act has provisions that forbid

9 adverse possession, that require transfers to be in

10 writing, and so the right itself can't be defeated. So

11 I agree with your premise.

12 Now, as to how that bears on injunctive

13 relief, we do not take the position that an

14 must automatically issue. This Court in eBay said very

15 clearly it mustn't, but one must look at the traditional

16 test for equitable relief.

17 And one of the factors in that test is

18 prejudice to the defendant, but it must be balanced

19 against prejudice to the plaintiff and the public

20 interest. And that is foreclosed if one uses laches as

21 a threshold bar.

22 It's foreclosed if one uses it as a ­­

23 JUSTICE SOTOMAYOR: Why? You'd be entitled

24 to money for their infringement. 3 years ­­ you only go

25 back 3 years, but if they continue to infringe in the

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1 future, presumably, you can get an order giving you

2 for that.

3 MR. BIBAS: We certainly agree that we're

4 entitled to damages, going forward, but we don't agree

5 that that's exclusive because I ­­ I'd point to the

6 Chief Justice's concurrence in the eBay case. A

7 copyright is a property right.

8 It comes with the right to exclude

9 presumptively. That right cannot necessarily be fully

10 enforced in all circumstances, but presumptively, it

11 ought to remain on the table to enforce with injunctive

12 relief.

13 Now, you are correct, Respondents have

14 entered into commercial agreements ­­ arrangements for

15 the next two years. It would be reasonable for a court

16 sitting in equity to say, let's balance the hardships.

17 The hardships between now and 2015 might look different

18 from the hardships in 2015 until the middle of the 21st

19 Century.

20 We might tailor the duration and the scope

21 of injunctive relief to save some damages, some

22 royalties for a few years, but that's not a reason to

23 defeat her right to exclude for the next four decades.

24 JUSTICE KAGAN: Mr. Bibas, I would have

25 thought that there was something in the copyright

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1 context that cuts against you, and that's that, because

2 of this separate accrual rule and the feature of these

3 rolling statutes of limitations combined with very, very

4 lengthy copyrights terms, that essentially a plaintiff

5 cannot bring suit for years ­­ decades ­­ and time the

6 suit in order to maximize her own gain.

7 That strikes me as something that we don't

8 usually see in statute of limitations cases. I mean,

9 we don't have very many cases where courts have applied

10 laches as against the statute of limitations, but that's

11 because you can't think of many instances in which it

12 would be considered unfair to take the entire statute of

13 limitations to bring a suit.

14 But in this context, you look at something

15 that seems very different. A plaintiff can wait 20

16 years, given the way the separate accrual work ­­ rule

17 works.

18 MR. BIBAS: Your Honor, I think your

19 considerations cut in favor of our position. Whether

20 our client brings suit now or 20 years from now, she

21 gets three and only three years' damages. The

22 in this case is that creative works are worth the most

23 right after they're released, and so the value of the

24 claim goes down.

25 Respondents get to keep the first 17 years

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1 of profits if she waits. So she has every incentive, as

2 the amicus briefs indicate, to file suit early. And,

3 indeed, courts can use adverse inferences against

4 plaintiffs who delay ­­ draw inferences and missing

5 witness instructions from their delay.

6 But let me point out that there are plenty

7 of situations in which there is a delay in suit. Take

8 Bay Area Laundry. Take a standard 30­year mortgage.

9 The mortgagee who waits until year 20 doesn't get to

10 claim 20 years' worth of payments, but there's nothing

11 that debars that mortgagee from claiming payments for

12 years 17 to 20. It would radically upend the law to say

13 that.

14 And to come back to your point that we don't

15 see laches in these cases, that, again, cuts our

16 direction.

17 JUSTICE SCALIA: Yeah, but the ­­ the

18 mortgagor does ­­ does not invest substantial amounts of

19 money the way MGM did here, on the assumption that,

20 since suit hasn't been brought for 20 years, there's ­­

21 there's no valid claim. I mean, that's the difference

22 in that situation.

23 You're talking about inducing ­­ or causing

24 at least, people who ­­ who proceed in good faith on

25 the assumption that 20 years have gone by. Nobody ­­

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1 nobody has questioned our doing it.

2 They invest substantial amounts of money,

3 and then, when that money starts to pay off, you file

4 suit and ­­ and you get three years' worth of ­­ of

5 their profits.

6 MR. BIBAS: Under the Copyright Act, they

7 are entitled to deduct all the expenses that are

8 attributable to earning the profits from infringement,

9 so Plaintiffs don't get a dime until Respondents recoup

10 those expenses.

11 Moreover, one who has notice of a registered

12 copyright in the face of protest has no legitimate

13 good­faith expectation and continue to infringe. Either

14 file a act, engage in settlement

15 negotiations, or infringe at your peril.

16 I'd like to reserve the balance of my time

17 for rebuttal.

18 CHIEF JUSTICE ROBERTS: Thank you, counsel.

19 Ms. Saharsky.

20 ORAL ARGUMENT OF NICOLE A. SAHARSKY,

21 FOR UNITED STATES, AS AMICUS CURIAE,

22 SUPPORTING THE PETITIONER

23 MS. SAHARSKY: Mr. Chief Justice, and may it

24 please the Court:

25 The only question before the Court is

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1 whether the courts below were right to bar this suit

2 entirely on laches ground. And on that question, we

3 agree entirely with Petitioner, that the suit should not

4 have been barred at the outset. But it is the

5 government's view that laches is available in

6 extraordinary cases to bar copyright infringement claims

7 brought within the statute of limitations for two

8 reasons.

9 First of all, laches, like equitable tolling

10 and other equitable principles, was a background

11 principle that Congress acted against when it enacted

12 the statute of limitations, and it said nothing to bar

13 it. We've already had the discussion here at Court

14 today about the text and how it doesn't bar it.

15 But second, for the reasons that

16 Justice Kagan gave, the copyright situation is unique in

17 that there is this separate accrual rule, which allows a

18 person to sue many years after the infringing conduct

19 started, so that it makes sense to at least be able to

20 consider laches.

21 Now, our view, though ­­

22 JUSTICE GINSBURG: On damages as well as

23 injunctive relief? I thought your brief said injunctive

24 relief, but not damages.

25 MS. SAHARSKY: Right. We would distinguish

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1 between equitable relief and legal relief, and that's

2 because that distinction was well­established in the

3 courts of equity and in the courts of law and

4 post­merger at the time this Court enacted in 1957.

5 JUSTICE KAGAN: We don't make that

6 distinction with respect to equitable tolling. Why

7 would we make it here?

8 MS. SAHARSKY: Well, because the history is

9 different. The history that this Court recognized in

10 cases like Mack, for example, 1935 case, where that

11 was a legal claim, the Court said, laches within a term

12 of the statute of limitations, is no defense of law.

13 And the Court has continued to pick up that

14 language in case after case. There are numerous cases

15 cited in the briefs. There was a 1985 ­­

16 JUSTICE SCALIA: Why can't we change our

17 mind? Why can't we change our mind?

18 MS. SAHARSKY: Because this is a statutory

19 claim that ­­ and a statute of limitations that Congress

20 put in place. And the question is: What is the

21 background rule against which Congress was acting?

22 Congress could change the background rule, but because

23 this is a statutory action, it's for Congress to do it,

24 as opposed to the Court.

25 JUSTICE SCALIA: And you say that none of

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1 the other instances in which we brought into law

2 equitable doctrines, none of those were applied with

3 respect to a prior enacted Federal statute? Is that

4 your position?

5 MS. SAHARSKY: No.

6 JUSTICE SCALIA: Well, I'll have to look it

7 up.

8 MS. SAHARSKY: Right. What I'm saying is

9 specific to the laches defense ­­ and what I'm saying

10 there is that there is a long history that laches did

11 not apply at law and that this Court has continued to

12 recognize that ­­

13 JUSTICE SCALIA: There was a long history

14 that tolling didn't apply at law, and then we changed

15 our mind.

16 MS. SAHARSKY: Right. Right. But I'm

17 saying ­­

18 JUSTICE SCALIA: And you're saying we ­­ we

19 never changed our mind where there was a statute of ­­

20 Federal statute of limitations? I ­­ I don't believe

21 that.

22 MS. SAHARSKY: I'm saying that, in the

23 laches context, we are not aware of any instances in

24 which this Court has used laches to bar a claim at

25 law ­­

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1 JUSTICE BREYER: That's not surprising

2 because, to show laches, you have to show unreasonable

3 delay plus reliance. So normally, it won't be

4 unreasonable within a limitation period, but this is a

5 unique statute. The uniqueness is not in the words, but

6 in the facts.

7 And therefore, the uniqueness is that it's

8 rolling. And as long as you have a movie that's going

9 to make money over 30 years, in year 33, they bring an

10 action against something that didn't happen till

11 year 30.

12 So when the government comes in and says,

13 oh, we'll just allow it as a defense ­­ you know, to law

14 but not to injunction, law here has the same effect as

15 an injunction. If you just leave it up to the legal

16 part, they can bring whenever they want, as long as the

17 movie is still making money.

18 And therefore, it has exactly the same

19 effect to let them ­­ they say, oh, you can't recover ­­

20 I mean, you can recover under law, you just can't have

21 an injunction. Who in their right mind would go ahead

22 and make this year after year, if a huge amount of money

23 is going to be paid to this copyright owner who delayed

24 for 30 years and didn't even seem to own it?

25 MS. SAHARSKY: Well, two ­­ two responses to

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1 that. First, as a general matter, we think it makes

2 sense for the laches defense to apply in ­­ in

3 fashioning equitable relief because that is a place

4 where are exercising discretion ­­

5 JUSTICE BREYER: I understand the words. My

6 specific question is, in the copyright area, as here ­­

7 MS. SAHARSKY: Yes.

8 JUSTICE BREYER: ­­ once you have given them

9 the right to apply laches to an injunction, you have

10 given them precisely nothing because exactly the same

11 thing will happen to them once you bring 15 legal

12 actions, as if you gave them the injunction.

13 And if there is a difference there, I

14 haven't been able to think of it yet. So ­­ so I don't

15 really understand the government's position in terms of

16 the practice.

17 MS. SAHARSKY: Okay. In terms of the

18 practical offense, the ­­ the Copyright Act statute

19 specifies the particular remedies that are available,

20 and it's fairly clearly distinguished between legal and

21 equitable remedies. The legal remedies are actual or

22 statutory damages, and those are limited to the past

23 three years.

24 And then the equitable remedies are the

25 profits of the defendant, the essentially unjust

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1 enrichment of the defendant, and then, as you mentioned,

2 Justice Breyer, the injunction situation.

3 Now, we are not saying that if ­­ if a

4 plaintiff has established copyright infringement, that

5 it's an all or nothing on . This Court

6 recognized in eBay ­­

7 JUSTICE BREYER: You still haven't answered

8 my question ­­

9 MS. SAHARSKY: I'm trying to.

10 JUSTICE BREYER: ­­ which comes to the same

11 thing. You're giving me legal arguments. You may be

12 right in that. I'll look into that.

13 But I'm saying, in practice, no one in his

14 right mind could go and continue to produce this movie

15 when every penny is going to have to go to the copyright

16 owner ­­ not every penny that they spent, but every

17 penny of profit. And ­­ and who's going to do it?

18 Because, every three years, they face a lawsuit.

19 MS. SAHARSKY: Well, that's what I'm trying

20 to say is that I don't think that that would be the case

21 if infringement were shown. This Court, for example,

22 recognized in the New York versus Cassini case, that in

23 fashioning injunctive relief, it's not just that you

24 give an injunction or you don't give an injunction, it

25 could be the case that, in a situation like this one,

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1 for example, the Court could say, I will allow the

2 defendant to continue with these that it has

3 entered into to continue using this film as a derivative

4 work, but I will pay a reasonable royalty, or I will put

5 forth ­­ call for a reasonable royalty to the plaintiff.

6 So there is some splitting of the difference

7 available to the Court in fashioning equitable remedies.

8 So I don't think the Court ­­

9 JUSTICE SCALIA: Could that

10 overrule the statement that you're entitled to sue for

11 all the profits within that 3­year period? You're

12 saying the injunction can ­­ can, in effect, say you

13 don't have to pay?

14 MS. SAHARSKY: Well, these are two different

15 remedies. There's the profits of ­­

16 JUSTICE SCALIA: Well, I understand that,

17 but does the second eliminate the first? If it doesn't

18 eliminate the first, Justice Breyer's point is

19 absolutely correct.

20 MS. SAHARSKY: I think that both are

21 susceptible to the Court's equitable consideration. The

22 profits ­­ the way that that is addressed in the

23 Copyright Act is that it is the profits of the

24 defendant, and you subtract out what the defendant

25 contributed.

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1 JUSTICE KENNEDY: Well, then ­­ then ­­ you

2 said both are subject to equitable consideration. We're

3 told by the Petitioner that the equitable rule of laches

4 simply can't apply. I was going to ask: Estoppel

5 applies; why isn't laches just a first cousin of

6 estoppel? Estoppel is an affirmative .

7 Why isn't laches here almost a misrepresentation?

8 And I don't understand the difference

9 between laches and estoppel in this respect. Estoppel

10 was an equitable remedy that's been taken into the law.

11 MS. SAHARSKY: Right. They are related, but

12 different. Laches involves sitting on your rights, to

13 the detriment of the defendant, whereas equitable

14 estoppel involves affirmative ­­ affirmative things, but

15 the plaintiff has ­­

16 JUSTICE KENNEDY: But suppose sitting on

17 your rights amounted really to an affirmative

18 representation. It seems to me very close, close enough

19 so that I'm not sure that we should distinguish between

20 laches and estoppel as being, so that the ­­ so that the

21 former is unavailable at all.

22 MS. SAHARSKY: Well, you're right that ­­

23 that laches can ­­ is a cousin of equitable estoppel and

24 that it's right that equitable estoppel could bar the

25 claim entirely. The reason that we are distinguishing

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1 between law and equity are two reasons. First of all,

2 there is a very long history that laches is unique to

3 the courts of equity, and this Court has recognized it.

4 It recognized it in Mack, it recognized in

5 the Oneida case, it recognized it in Merck, it was in

6 the Pomeroy treatise, that this was a classic division

7 that was only in equity, and this Court has continued to

8 recognize it.

9 But the second reason is that it makes sense

10 to look to laches principles in fashioning equitable

11 relief in this context as opposed to the legal relief,

12 because under the Copyright Act, when a person shows, a

13 plaintiff shows infringement, that person is entitled to

14 actual or statutory damages in a certain amount. And

15 that is a mechanical calculation that we expect juries

16 to make.

17 But it's not the ­­

18 JUSTICE GINSBURG: Ms. Saharsky, this ­­

19 before you sit down, there's one puzzle I'd like you to

20 address for us, and that is your position is damages

21 within the 3 years, okay; injunction, you can adjust for

22 the laches.

23 In the patent area, and also intellectual

24 property, the Federal Circuit has said that laches may

25 bar as it goes ­­ just the reverse, laches may bar

25 Alderson Reporting Company Official

1 monetary relief, but not injunctive relief.

2 What explains the difference between, in the

3 patent area, no monetary relief, but yes, injunctive

4 relief, and your position in the copyright area,

5 monetary relief but no injunction or a modified

6 injunction?

7 MS. SAHARSKY: You're right that there is

8 that difference. The Patent Act is different in several

9 respects. First of all, in terms of the time period, it

10 doesn't have a statute of limitations in which ­­ after

11 which a claim is barred. It says that you can only

12 recover damages for a certain period of time. There's

13 actually a shorter period of limitation ­­ or a shorter

14 period of protection in the Patent Act, and you have the

15 Patent Act time period that was enacted well before the

16 copyright period here.

17 So we think that the patent context is

18 different, but I take your point that the analysis that

19 the Federal Circuit underwent is not the same type of

20 analysis that we are undertaking now. Ours is based on

21 the background principle on which Congress acted, as

22 opposed to that analysis, which was more on policy

23 grounds.

24 Thank you.

25 CHIEF JUSTICE ROBERTS: Thank you, counsel.

26 Alderson Reporting Company Official

1 Mr. Perry.

2 ORAL ARGUMENT OF MARK A. PERRY

3 ON BEHALF OF THE RESPONDENTS

4 MR. PERRY: Mr. Chief Justice, and may it

5 please the Court:

6 The government agrees with us that the 1957

7 amendment did not abrogate the laches doctrine. Since

8 that's the only question presented, we submit that the Court

9 should affirm.

10 Now, the government has gone at great length

11 about this law­equity distinction. The Copyright Act of

12 1909, in Section 27, abolished the distinction between

13 law and equity for copyright purposes, Section 27 of the

14 1909 Act. The Law and Equity Act of 1915 abolished the

15 same distinction for all civil actions.

16 It says, "In any action at law, all

17 equitable defenses may be asserted." And if one looks

18 in Black's, for example, a reactive source, not a

19 predictive source, what is an equitable defense? It

20 says, "A defense formerly available at equity, now

21 available in all actions." And examples are unclean

22 hands, laches, and estoppel. That's in the Black's Law

23 Dictionary.

24 And then this Court, after the Rules

25 Enabling Act, Justice Scalia, of 1934 ­­ which is

27 Alderson Reporting Company Official

1 different, by the way, than 2072 in the current statute.

2 The '34 version, which is in the back of our brief,

3 broke out law and equity, retained this Court's

4 equitable powers and authorized the Court to merge them.

5 And in rule 8, this Court did exactly that. This Court

6 surveyed the

7 available defenses ­­

8 JUSTICE SOTOMAYOR: Counsel, how do you deal

9 with the language in Holmberg, Mack, and Russell?

10 MR. PERRY: Your Honor ­­

11 JUSTICE SOTOMAYOR: Then you're after ­­

12 I've looked, I’ve had ­­ not myself, but my ­­

13 looked at all of the cases, and they are absolutely

14 right, that in every case we've applied laches, it's

15 only where there's not been an underlying statute of

16 limitations.

17 And in every case in which there's an

18 underlying statute of limitations, we have said no

19 laches.

20 MR. PERRY: Justice Sotomayor, let me answer

21 that in two steps. The Morgan case involved a statute

22 of limitations. The Court applied laches ­­ or said

23 laches was available five times, and that's an action at

24 law. That plaintiff brought a claim for compensatory

25 and punitive damages.

26 So that's the most recent version where all

28 Alderson Reporting Company Official

1 of those things are not true that the Petitioner says.

2 Also, the ­­

3 JUSTICE SOTOMAYOR: They lost there.

4 MR. PERRY: I'm sorry?

5 JUSTICE SOTOMAYOR: They didn't apply laches

6 there.

7 MR. PERRY: Your Honor, this Court said that

8 laches was available five times ­­

9 JUSTICE SOTOMAYOR: But the facts didn't

10 support that, meaning that they didn't grant such ­­

11 MR. PERRY: It wasn't raised, Your Honor.

12 That point wasn't raised. This Court said, over five

13 times, that where you have a rolling statute of

14 limitations, laches is a necessary protection for the

15 defendant because the events may move so far away from

16 the underlying facts, which is very true here.

17 The Holmberg case is, in many ways, our best

18 case, Justice Sotomayor. Let's look at what Holmberg

19 said. Holmberg was, remember, discussed in the

20 legislative history. Congress ­­ somebody in Congress

21 focused on it. It says, first, when Congress leaves to

22 the Federal courts the formulation of remedial details,

23 it can hardly expect them to break with historic

24 principles of equity.

25 And we know, from both the House and the

29 Alderson Reporting Company Official

1 Senate report, this 1957 statute specifically said the

2 remedial details are up to the court because we want the

3 courts to continue to apply equitable considerations.

4 So what are those equitable principles?

5 This Court went on in Holmberg and said, first, a suit

6 in equity may fail though not barred by the act of

7 limitations. That's a pretty clear equitable principle,

8 and, of course, we win this case under that principle.

9 And then the Court went on and articulated

10 the goose­and­gander rule, that these are two sides of

11 the same coin; that laches and tolling go together.

12 They travel together. They are not cousins, Justice

13 Kennedy. They are fraternal twins. You don't get one

14 without the other.

15 And what the Court said is if want of due

16 diligence by the plaintiff may make it unfair to pursue

17 the defendant, laches, then also fraudulent conduct on

18 the part of the defendant may make it unfair for the

19 plaintiff to proceed ­­ fraudulent concealment.

20 And then the Court said ­­ and this is the

21 critical point ­­ it cited Bailey v. Glover, which also

22 had the goose­and­gander rule embedded in it. It said

23 this equitable doctrine is read into every Federal statute

24 of limitations; not fraudulent concealment, but the twinned

25 nature of tolling, plus laches, that every time the

30 Alderson Reporting Company Official

1 courts have the power to adjust the rights and

2 obligations of the parties using their equitable powers,

3 that happens on the front end and on the back end.

4 My friend, Mr. Bibas, has to respond to that

5 by saying, Tolling is available, discovery is available,

6 waiver, abandonment, acquiescence, estoppel, and all of

7 the other equitable doctrines, eight of which are listed

8 in rule 8 that this Court has determined are available

9 in all civil actions.

10 But he says, laches ­­ which this Court also

11 listed in rule 8, is not available in this civil action.

12 That is a bizarre argument, Your Honor, and it has no

13 support whatsoever. This Court confronted the same

14 point ­­ excuse me.

15 JUSTICE KAGAN: "Bizarre" seems to me a

16 little strong, I mean, because I take it that Mr. Bibas

17 is making a statutory argument ­­ I mean, he's saying

18 not the language of the statute, but he's saying what

19 was Congress thinking at the time. Congress was faced

20 with all of these precedents, essentially saying laches

21 was not available. There are no cases out there,

22 really, where laches does cut into a defined statute of

23 limitations period.

24 And then you have the feature that

25 Congress knew that it was enacting these rolling

31 Alderson Reporting Company Official

1 statutes of limitations, you would have thought that it

2 might have been foremost in their head, how are we going

3 to prevent somebody from suing 30 years later? And they

4 did nothing of the kind.

5 They could very easily have made it clear

6 that laches applied, or they could have set an outer

7 limit, or they could have done a number of things, and

8 they really didn't do any of them. So how are we to

9 account for all that?

10 MR. PERRY: Justice Kagan, the Congress

11 cited Holmberg, which cites Patterson as the leading

12 laches case, and cites Russell as well, and Patterson

13 dealt with this very point. Patterson, which did

14 hold ­­

15 JUSTICE SCALIA: Excuse me. Congress cited

16 what?

17 MR. PERRY: I'm sorry. The ­­ the committee

18 reports cite the Holmberg case, not Congress. Sorry.

19 Thank you, Your Honor.

20 The Patterson case, however, squarely

21 held ­­ and, Justice Sotomayor, this goes to your

22 question too ­­ that a claim brought within the statute

23 of limitations, a State statute borrowed for a Federal

24 claim, and this involved property, copyrights are property, this

25 involved a gold mine, and it's exactly analogous.

32 Alderson Reporting Company Official

1 What happened there is the plaintiff sat

2 around, had a part interest in the gold mine, sat around

3 and waited until somebody else developed it enough to

4 make a profit and then rushed in and demanded a share.

5 That is what Ms. Petrella did in this case. She is

6 demanding her share in the gold mine after my clients

7 spent years developing it, okay?

8 What Congress ­­

9 JUSTICE SOTOMAYOR: It is true, however,

10 that your ­­ while you ­­ all of your investment in this

11 is going to be offset against your profits, correct?

12 MR. PERRY: That is not exactly clear, Your

13 Honor. She sued in January of 2009 to pick up the

14 profits back to January of 2006. The biggest investment

15 was in 2005 for the 25th anniversary edition. We think

16 she's going to go into to court and say, "I don't have

17 to offset that because it's more than three years old."

18 So that she wants only ­­ she wants to skim

19 the cream. She gets to look back and pick her three ­­

20 JUSTICE SOTOMAYOR: You didn't ­­ what's so

21 bad about that?

22 MR. PERRY: Because, Your Honor ­­

23 JUSTICE SOTOMAYOR: Why should you ­­ you've

24 gotten a lot of profits in those 18 years, and, in fact,

25 at one point, when she did reach out to you, you told

33 Alderson Reporting Company Official

1 her, "Why sue? You're not going to get any money.

2 We're not making any."

3 MR. PERRY: Your Honor, on a net basis, the

4 film still has never made a profit, for one ­­

5 JUSTICE SOTOMAYOR: Well, if it has not,

6 then we're back to the point I made. Are you

7 disagreeing with the Government's position that the

8 Court has equitable power in injunctive relief to decide

9 how much you pay forward?

10 MR. PERRY: Two answers, Your Honor. First,

11 Congress looked at that ­­ and this is the reason that

12 the statutory damages remedy is in the statue ­­ to

13 encourage rights asserters to, early, go into court and

14 establish priority and availability of their rights if

15 they have them.

16 So if there are no profits, if there are no

17 damages ­­ of course, this plaintiff has no damages ­­

18 JUSTICE SOTOMAYOR: I don't understand. Why

19 didn't you just go in and get a declaratory judgment

20 when you first heard from her?

21 MR. PERRY: Because, Your Honor, we sent ­­

22 she made a demand, which we refused. We get lots of

23 demands, and we refuse them. And the last letter in the

24 series was, "You have no claim." Then she did nothing.

25 Actually, she did more than nothing. She showed up as

34 Alderson Reporting Company Official

1 our guest at a party for the 25th anniversary,

2 suggesting that she agreed with our interpretation of

3 this. And then she didn't sue for years and years

4 later.

5 The events in question ­­ the reason that

6 the three year ­­ the ruling of three years is, as in a

7 Title 7 case, what's not being litigated in this case if

8 it were to go to trial is the last three years. It's

9 1961, '62 and '63. Whenever the film was released ­­

10 the disputed events happened in the early 1960s, so

11 that, every year she waits, for her own strategic

12 reasons, she's getting farther away from those events.

13 And this Court answered the same point in

14 Patterson about the mine. It said, of course, you can

15 apportion the profits to account for the investment, but

16 you can never ­­ you can never reimburse the developers

17 for the risk of getting naught. You can never reimburse

18 them for the work they did while she was sitting on the

19 sidelines, and, therefore, at some point, the reliance

20 interest was so great.

21 And then we haven't talked yet about the

22 evidentiary prejudice. These cases get so old, the

23 witnesses have died. They are unavailable. And she is

24 now trying to tell the Court ­­ the courts, the judicial

25 system, that her father lied in a written

35 Alderson Reporting Company Official

1 representation, yet her mother, who could have testified

2 to that, has passed on.

3 JUSTICE SOTOMAYOR: Counsel, she was going

4 to get this copyright when her father died. Under no

5 circumstance, even if she had sued in '92, could she

6 have brought a claim in the 1960s. She didn't have a

7 copyright then.

8 MR. PERRY: You're absolutely right, Your

9 Honor.

10 JUSTICE SOTOMAYOR: Your complaint is not

11 against the witness dying. Your complaint is about what

12 Congress does, which is to give a person the right to

13 keep a copyright or renew it when the individual with

14 whom you probably dealt with is dead. That's always

15 going to be the case.

16 MR. PERRY: Justice Sotomayor, she still has

17 her copyright. She can enforce it against the world.

18 And she still has a contractual right with MGM in which

19 she will get participation rights pursuant to the

20 .

21 She wants to renegotiate that contract.

22 That's what this case about. She could have done that

23 in 1991. She could have brought this lawsuit in 1991.

24 We are not seeking to task her with her father's death

25 or anything that happened before 1991.

36 Alderson Reporting Company Official

1 After 1991, however, Mr. LaMotta, key

2 witness as to the collaboration of the 1963 screenplay

3 has become unavailable to testify.

4 Vickie LaMotta, who could have established

5 our defense that the screenplay reflects real life,

6 rather than imaginary events, because she is a central

7 character in that, passed away.

8 And Mrs. Petrella, who ­­ if you read Paula

9 Petrella's declaration, she says, "My mother was up late

10 at night typing something," implying that it was the

11 book ­­ had she sued in 1991, we would have put her

12 mother under oath and said, "What were you typing?"

13 And she would have said, "The screenplay,"

14 or something else. She would not have said the book, we

15 believe, but we can't ask her that question because she

16 waited long enough for all the witnesses, not her

17 father, all the other witnesses who have percipient

18 knowledge to pass away.

19 And laches is a prejudice doctrine. It's

20 not a timeliness doctrine. It requires delay as a

21 trigger, but it turns on prejudice, and it's ­­

22 JUSTICE KAGAN: Mr. Perry, the Ninth Circuit

23 here used this language of presumption. It said, "If

24 any part of the alleged wrongful conduct occurred

25 outside of the limitations period, courts presume that

37 Alderson Reporting Company Official

1 the plaintiff's claims are barred by laches," and you

2 just said, laches is, at least in part, a prejudice

3 doctrine.

4 MR. PERRY: Yes, Your Honor.

5 JUSTICE KAGAN: Do you concede that that

6 presumption is wrong?

7 MR. PERRY: No, Your Honor. First, I think

8 they spoke of a presumption and then didn't apply it, and

9 certainly, the district court didn't ­­

10 JUSTICE KAGAN: Well, that's one ­­ you

11 know, one understanding of the opinion is, look, that's

12 just nothing. But do you agree with it?

13 MR. PERRY: This Court, Justice Kagan, in

14 the Foster v. Mansfield case in 1892 said ­­ and I

15 quote ­­ after ten years, quote, "There is certainly a

16 presumption of laches, which it is incumbent on the

17 plaintiff to rebut," which is the same concept that the

18 Ninth Circuit articulated, although we submit, did not

19 apply.

20 And the Federal Circuit, in the Akerman

21 case, very carefully explained what this means. It's a

22 Federal Rule of Evidence 301 type presumption, sometimes

23 called a bursting bubble presumption, which says that

24 when the defendant raises this defense, it requires the

25 plaintiff to come forward with the burden of production

38 Alderson Reporting Company Official

1 of an excuse or a rationale for the delay, but the

2 burden of persuasion always rests on the defendant

3 because it is an .

4 And the Akerman decision is very clear on

5 this, and to the extent the Ninth Circuit spoke of

6 presumptions, that's exactly what it meant because in no

7 place was an evidentiary presumption applied against

8 her, and, in fact, of course, this was a summary

9 judgment case, so the evidence was undisputed. The

10 record was irrefutable as to the prejudice.

11 JUSTICE KAGAN: Well, I guess, partly, that

12 suggests a burden of persuasion, but partly, it suggests

13 just a kind of starting position is that, if there was

14 conduct outside the limitations period, it was

15 prejudicial, and I guess I want to know why that would

16 be.

17 MR. PERRY: Your Honor, I think it's ­­

18 there's a common sense concept that, if you are within

19 ­­ if the claim were brought within the initial

20 three­year period, after the claim first accrued in

21 1991, you might say, colloquially, there's a

22 presumption that laches doesn't apply. In fact, the

23 Sixth Circuit said that in the Chirco case.

24 Once you move farther and farther away from

25 the initial act that starts the clock for laches

39 Alderson Reporting Company Official

1 purposes, which may not be the same event, is for statute

2 of limitations purposes, it’s another one of the

3 disconnects between these two doctrines. The farther one

4 gets away, it is a reality of the world, as the

5 Government notes in its brief, that the evidentiary

6 prejudice is likely to increase because documents get

7 destroyed, witnesses lose their memory, and so forth.

8 JUSTICE KAGAN: Well, one can agree with

9 that and not think that if conduct happened three years

10 and two days earlier, there is ­­ that the burden of

11 coming forward and the to give a reason flips

12 to the other side.

13 MR. PERRY: I agree with that, Your Honor.

14 And to be clear, the district court didn't apply any

15 such presumption and didn't put any such burden on

16 Ms. Petrella, so the language in the Ninth Circuit

17 opinion is irrelevant to when a case was tried in the

18 district court at the summary judgment stage, and

19 certainly irrelevant to the district's court conclusion,

20 which is reviewed, of course, for an abuse of discretion

21 standard ­­ you know, on the merits of the applicability

22 of laches doctrine.

23 All of which, by the way, the Petitioner

24 never raised in the district court, in the Ninth

25 Circuit, in the ­­ you know, the presumption appears for

40 Alderson Reporting Company Official

1 the first time in the Petitioner's reply brief. The

2 government has brought it up that it was not ­­ you

3 know, it's not properly preserved. We're not afraid of

4 it.

5 This case came here on a very simple legal

6 question, a binary question, is laches available? The

7 Court should answer that question "yes." The details of

8 this particular case has been reviewed by two courts on

9 an undisputed record, and we think they got it right.

10 JUSTICE GINSBURG: Mr. Perry, you said that

11 the ­­ the objective is to get the copyright holder to

12 sue early on and not to wait, but if the ­­ if no

13 profits had been made in that early period and it would

14 cost the plaintiff more to mount a lawsuit than the

15 plaintiff could possibly receive in damages, why shouldn’t

16 the plaintiff, who has a copyright that's going to run a

17 long, long time, sue?

18 If things stay the same, no suit will ever

19 be brought. Why is it unreasonable for the plaintiff to

20 see if the copyright is worth anything?

21 MR. PERRY: Justice Ginsburg, that's why

22 Congress put in the statutory damages and also an

23 attorneys' fee provision, so that even if there are no

24 profits, and many works of authorship never become

25 profitable, there is an incentive ­­ an economic

41 Alderson Reporting Company Official

1 incentive for the rights asserter to come forward to

2 court, and clarify those rights, because these are

3 valuable assets.

4 Even money­losing films, books, songs, and

5 so forth are traded, are financed, are bought and sold,

6 either individually or as part of companies. And the

7 entire economic system benefits from greater clarity and

8 earlier resolution of rights.

9 And I should ­­ I should point out in this

10 respect my clients ­­ the studios generally own many,

11 many copyrights. We are on both sides of the "v." This

12 is not a plaintiff versus defendant ­­

13 JUSTICE BREYER: I take it, in the example

14 that Justice Ginsburg gave, your position ­­ tell me if

15 I'm wrong ­­ is, of course, the defense laches in

16 principle applies, but the defendant will lose because

17 the plaintiff did not wait an unreasonably long time.

18 MR. PERRY: Yes.

19 JUSTICE BREYER: She waited a reasonably

20 long time, for the reason that Justice Ginsburg gave.

21 MR. PERRY: Justice Breyer, thank you. And

22 I entirely agree. There is a distinction ­­

23 JUSTICE BREYER: I thought you might agree.

24 (Laughter.)

25 MR. PERRY: ­­ in this case between the

42 Alderson Reporting Company Official

1 availability of laches and the applicability of laches.

2 Our position is that laches is an available defense in

3 every civil action. That's what rule 8(c) says. Rule

4 8(c) has a list of affirmative defenses. It is in

5 there.

6 It may not be a good defense ­­

7 JUSTICE SCALIA: Well, that may just mean ­­

8 you know, where it is a defense, it is an affirmative

9 defense that has to be treated the way rule 8(c) says.

10 I don't think that rule 8(c) establishes that it applies

11 in law, as well as in equity, and that's the question I

12 want to ask you.

13 How ­­ do you ­­ do you say that ­­ that

14 laches was a defense available at law before the Federal

15 Rules were enacted? Or do you say that courts continue

16 to have the power to bring it from equity into law after

17 the rules were enacted? And if the latter, why so?

18 MR. PERRY: The latter, Your Honor, for

19 three reasons. First, the Law and Equity Act of 1915

20 authorized the courts to do that. Second, the Rules

21 Enabling Act of 1934 authorized the courts to do that.

22 And third, this Court's historical practice of doing

23 exactly the same thing with tolling in the Irwin case,

24 with unclean hands in the Precision Instruments case,

25 with in the Hazel­Apta case ­­

43 Alderson Reporting Company Official

1 JUSTICE SCALIA: They had ­­ they had been

2 used in law before ­­ before the rules ­­

3 MR. PERRY: I don't believe unclean hands

4 ever had been before Precision Instruments, Your Honor.

5 And certainly, it is the case that every other equitable

6 defense that this Court has ever looked at applies in

7 law. This Court has never said, in the modern era, that

8 any of the traditionally equitable defenses, and there

9 are eight of them listed in rule 8, is not available in

10 an action that would historically have been

11 brought at law.

12 And by the way, I should footnote here that

13 this is an action in equity. Had she brought this

14 action ­­ the only relief sought in the prayer is an

15 accounting for profits and an injunction, both of which

16 chancery could have awarded. So that the claim ­­ that

17 question is hypothetical in this case. This is an

18 equitable case, she seeks equitable remedies, they are

19 subject to equitable defenses.

20 But as a philosophical matter, Justice

21 Scalia, if tolling, laches ­­ excuse me ­­ estoppel,

22 waiver, abandonment, unclean hands, fraud all apply in

23 at law ­­

24 JUSTICE ALITO: If we search ­­ if we search

25 every Federal ­­ every reported Federal decision since

44 Alderson Reporting Company Official

1 1938, how many would we find in which the Court

2 recognized the available of laches as a defense to a claim

3 for legal relief?

4 MR. PERRY: In this Court, Your Honor, you

5 would find the Morgan case. You would find the Bay Area

6 Laundry case, which is a MABA case that I believe, under

7 the toll Seventh Amendment analysis, would be viewed as

8 legal because it had no analogue at common law, both of

9 which recognized that, where you have a rolling statute

10 of limitations and an action at law, laches is an

11 available remedy to the abuses.

12 JUSTICE KAGAN: Is your argument limited to

13 that? Would you say laches is also available when

14 there's no continuing violation or when there's no

15 rolling period?

16 MR. PERRY: Yes, Your Honor, absolutely. It

17 is ­­ it is a complementary or supplementary doctrine

18 that has always traveled together. It becomes more

19 apparent and, frankly, more useful in the rolling

20 statute of limitations context.

21 As the Morgan court made clear, it is that

22 kind of cases where, because of the structural feature

23 of the statute, the action may be temporally very

24 divorced or separated from the events that are being

25 disputed, that laches may have its role to play.

45 Alderson Reporting Company Official

1 JUSTICE KENNEDY: Can you tell us, in

2 response to Justice Alito's second part of his question

3 about the other cases ­­ you talked about the two

4 Supreme Court cases. You said, if you read every

5 Federal decision, since the beginning of time ­­

6 MR. PERRY: Yes, Your Honor. So in the copyright

7 context, every court of appeals to have considered the

8 question has applied it to copyright cases, including

9 legal claims, except the Fourth Circuit, although the

10 Fourth Circuit has a subsequent trademark case that

11 calls that, we believe, into question.

12 Outside of the copyright context, in the

13 patent context, the Federal Circuit in the Ackerman

14 case, I cited, clearly applies it. And in other

15 contexts, there are some ­­ it doesn't come up all that

16 often.

17 We cited several cases, the Teamsters case

18 and the Maxim case from the Seventh Circuit, which has

19 the most developed jurisprudence, both of which, in very

20 detailed analyses by Posner, which addressed all

21 of the circuit court authorities pretty much, conclude

22 that laches applies to actions in equity as well as

23 actions at law, if that old distinction makes sense.

24 And, again, I would point the Court back as

25 well to the Gulfstream case, where this Court, the last

46 Alderson Reporting Company Official

1 time it looked at the Law and Equity Act of 1915,

2 determined that, for purposes of establishing appellate

3 jurisdiction, the old law­equity divide was, quote,

4 "infelicitous" and not necessary any more because of the

5 merger and that that was no longer necessary.

6 JUSTICE KENNEDY: Assume ­­ assume we have

7 an interest, just assume we do, in not having too many

8 suits simply to protect your rights in ­­ in cases where

9 the copyright may not be worth much or may not be

10 well­established. Which rule, yours or the

11 Petitioner's, is more helpful in this regard?

12 MR. PERRY: So our rule, the availability of

13 laches, has been the rule since the 19th century. This

14 Court recognized laches in the Callahan case, in a

15 copyright case, and it has been applied in every circuit

16 except the Fourth, which doesn't get many copyright

17 cases. 90 plus percent of all copyright cases, Your

18 Honor, are filed in the Second Circuit or the Ninth

19 Circuit.

20 Both of those ­­

21 JUSTICE SOTOMAYOR: That is true about the

22 Ninth Circuit, but between the Second, Sixth, Tenth, and

23 Eleventh, I always ­­ I thought those circuits announced

24 laches are available, but only in an exceptional

25 circumstance. And I actually don't know how many cases

47 Alderson Reporting Company Official

1 they barred suit ­­ copyright suit on ­­ completely on

2 the basis of laches.

3 MR. PERRY: Justice Sotomayor, we agree it's

4 an exceptional circumstance. And this goes back to

5 Justice Breyer's question. There's a difference

6 between ­­

7 JUSTICE SOTOMAYOR: Just answer. Did you

8 find any case where they actually applied laches?

9 MR. PERRY: Sure. The Second Circuit, in

10 the New Era case, applied to laches to bar an injunction

11 against a Scientologist ­­

12 JUSTICE SOTOMAYOR: Injunction, but not

13 the suit completely?

14 MR. PERRY: I don't remember, actually.

15 Certainly, the Danjaq case in the Ninth Circuit

16 canvasses this question.

17 JUSTICE SOTOMAYOR: The Ninth Circuit, I

18 know ­­

19 MR. PERRY: And this Court, of course ­­

20 JUSTICE KENNEDY: Could you finish answering

21 my question?

22 MR. PERRY: Yes, Your Honor.

23 Justice Kennedy, our rule, the availability of laches,

24 is the status quo. It has been the status quo for more

25 than a 100 years. It has not led to a plethora of

48 Alderson Reporting Company Official

1 litigation. It has not led to a bunch of frivolous

2 suits. One of Petitioner's amici says that laches

3 appears in something like 1 percent of all reported

4 cases as an issue, not even ­­you know, the central

5 issue.

6 However, if the Court were to change the

7 rule, depart from the status quo, announce for the first

8 time, in its history, that this equitable doctrine is

9 not available in this class of cases or, by the way,

10 Petitioner's rationale is not limited to this case, it's

11 every case, then the studios and other potential

12 defendants would have the economic incentive to bring

13 declaratory actions or contract actions or other

14 preemptive suits to clarify rights, increasing

15 litigation, increasing complexity.

16 It is absolutely undisputed, I would

17 think ­­ or indisputable at least, that the rule

18 proposed by Petitioner would lead to more litigation.

19 Our rule leads to less.

20 Our rule is what has always has been the

21 law ­­ you know, our rule goes to this. And,

22 Justice Sotomayor, if I could pick up on the question

23 about outcomes. It is a discretionary doctrine, so some

24 cases bar injunctions; some cases don't.

25 This Court, in the 19th century, the

49 Alderson Reporting Company Official

1 Saxlehner cases, the mineral water cases, barred the

2 injunctions. The McLean liver pill case didn't bar the

3 injunction. That is because the discretionary nature of

4 the doctrine allows flexibility in its application, but

5 it has always been known and understood, particularly in

6 the gold mine cases, and this is just like a gold mine

7 case, like the Patterson case, it barred the

8 action.

9 It said, you can't get damages, and you

10 can't get an injunction. That's the defense we asserted

11 in this case. And, again, the Petitioner did not

12 dispute that in the district court, did not dispute that

13 in the Ninth Circuit, did not dispute that in the cert

14 petition ­­ you know, that issue we think ­­

15 JUSTICE SCALIA: Excuse me. Did not dispute

16 what? What?

17 MR. PERRY: That, if laches is available,

18 it bars the entire suit, Your Honor.

19 JUSTICE SCALIA: Okay.

20 JUSTICE KAGAN: Mr. Perry, what troubles me

21 a bit about your argument is I think that the dearth of cases

22 on this is probably explainable by the fact that people

23 just haven't thought that they had a laches defense when

24 a plaintiff brought a suit within a statute of

25 limitations period.

50 Alderson Reporting Company Official

1 And now, if we open this all up, grant it in

2 a statutory context, in which it makes some sense to

3 give people a laches defense, if we open this all up,

4 we'll be seeing motions that nobody ever dreamed of

5 before.

6 MR. PERRY: Your Honor, let me answer in two

7 steps. In copyright cases, this has been a well

8 understood and available defense since Judge Learned

9 Hand's opinion in the Haas case, at least, and gets

10 asserted with some regularity and there's a decision

11 from every Circuit, just about, that hears these kinds

12 of cases, so I think, empirically, I'm not sure that's

13 right.

14 JUSTICE GINSBURG: Why should it be

15 different from the patent case?

16 MR. PERRY: Your Honor, we don't think it

17 should be different than the patent case. We think the

18 same ­­ the availability should be there.

19 JUSTICE GINSBURG: So you think the Federal

20 circuit's decisions are wrong?

21 MR. PERRY: To the extent it says that

22 there's a categorical bar on applying laches to

23 injunctions, that can't be right. That can't be right

24 after eBay. That was a pre­eBay decision that reflected

25 the Federal circuit's predilection for ­­ for

51 Alderson Reporting Company Official

1 categorical rules. This Court made clear, in eBay, that

2 all equitable doctrines are discretionary.

3 Justice Kagan, the second answer to your

4 question is this Court wouldn't be announcing it for the first

5 time. This Court has twice looked at this very

6 question, rolling statutes of limitations, in Bay Area

7 Laundry and in Morgan. And in both times, the Court

8 said the statute of limitations rolls forward, and in

9 both times, it said the potential abuse of that is

10 policed by the laches doctrine.

11 JUSTICE SCALIA: But you've said ­­ I think

12 you've said that ­­ that it would apply to ordinary

13 statute of limitations. So if you have a six­year

14 statute of limitations and you don't sue until five

15 years after, you're subject to the defense, well, you

16 should have ­­ should have sued sooner.

17 MR. PERRY: That's correct, Your Honor. And

18 you can ­­ you can ­­

19 JUSTICE SCALIA: I ­­ I share Justice

20 Kagan's reservation about that. Could we limit our

21 opinion just to rolling statutes?

22 MR. PERRY: Your Honor, it's an equitable

23 doctrine, and of course, it can be adjusted. It can

24 also be clarified, though, that within the initial term

25 of statute of limitations, it very rarely will apply.

52 Alderson Reporting Company Official

1 But there will be cases. The Patterson case ­­ this

2 Court's decision on Patterson is on all fours with this

3 case. And this Court held that laches barred the suit,

4 even though the statute of limitations had not run.

5 The Second Circuit's decision in New Era is

6 an example of a copyright case, where, because the books

7 had already been published and put on the retailers'

8 shelves, the injunctive request that would have required

9 the recall and destruction of those books came too late

10 because the Petitioner had actual knowledge ­­ the

11 plaintiff had actual knowledge and could have sued

12 earlier.

13 Or you can think of a strategic situation,

14 where you know the key witness is on death's door, and

15 you wait for that witness to keel over before you file

16 suit. Even if you're within the statute, that ­­ you

17 know, she who seeks equity must do equity. And there

18 will be situations, Justice Scalia, where within that

19 same period ­­ it will be extraordinary. It will be

20 unusual.

21 But on a rolling statute, it will happen

22 with increasing frequency because, the farther you get

23 away from the events in question, the more likely the

24 prejudice will arise, the evidentiary prejudice and the

25 expectations­based or reliance prejudice, both of which

53 Alderson Reporting Company Official

1 were established on this record, both of which bar this

2 claim, both of which were found by the district court,

3 reviewed by the Ninth Circuit for an abuse of discretion

4 and not found.

5 CHIEF JUSTICE ROBERTS: Does the laches

6 defense bar everything in the future? It is, after all,

7 a rolling statute of limitations.

8 MR. PERRY: Your Honor ­­

9 CHIEF JUSTICE ROBERTS: To the extent your

10 concern is reliance, okay, wait until the reliance is ­­

11 you know, off ­­ off the table. Then you've got three

12 years to go ahead.

13 MR. PERRY: We ­­ we think it bars her claim

14 against MGM to renegotiate this contract because of

15 those unique sequence of events. If there were no

16 question about a past historical act, it may be that an

17 ongoing infringement, particularly a willful

18 infringement, which comes up often, the courts have said

19 that past stuff isn't going to be barred, but future ­­

20 or, excuse me, past remedies are barred, but future

21 injunctions may not be.

22 Effectively, this Court said that in McLean

23 and Menendez, the trademark cases, where the liability

24 for trademark infringement ­­ willful trademark

25 infringement was clear. Here, we have a finding ­­

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1 CHIEF JUSTICE ROBERTS: Well, not just

2 injunctions. I mean, let's say they ­­ you know, they

3 released the Blu­ray version or whatever, and so, in a

4 particular two­year period, you make a lot of money, and

5 the suit should have been brought before that. Well,

6 starting when the sales go down, you still have a

7 three­year period where you're making the routine

8 amount.

9 MR. PERRY: So here's where film is

10 different. She doesn't have any right in the film, to

11 be clear. She claims a right in the screenplay, and she

12 claims the film as a derivative work. The re­release of

13 the film, on film, on television, VHS, Laserdisc, DVD

14 Blu­ray, whatever gets them in, it’s the same alleged

15 infringement. There's no distinction for this claim.

16 There are other copyright claims, Mr. Chief Justice, but

17 that does matter very much, the format and so forth.

18 For this claim, it makes no difference

19 whatsoever. It is just like the Morgan case, a repeat

20 act of discrimination by the same supervisor over and

21 over and over again. And that is why in these

22 circumstances ­­

23 JUSTICE SOTOMAYOR: How about your creation

24 of another derivative work?

25 MR. PERRY: Your Honor, I believe if ­­ if

55 Alderson Reporting Company Official

1 these studios ­­ well, first of all, if somebody else

2 recreated a different derivative work, this case doesn't

3 bar her at all. She has all of her rights, and she can

4 assert them against the world.

5 Laches is a personal doctrine against two

6 litigants. It's like an estoppel. Okay. It is an

7 estoppel. Second ­­

8 CHIEF JUSTICE ROBERTS: Briefly.

9 MR. PERRY: Thank you, Your Honor.

10 Second, if the studios ­­ these studios were

11 to prepare a new work, a remake or a sequel, we would

12 not take the position that laches applies there because

13 it is a new work, as opposed to ­­ and my answer to

14 Mr. Chief Justice ­­ the repeat release of the same

15 work.

16 CHIEF JUSTICE ROBERTS: Thank you, counsel.

17 Mr. Bibas, five minutes.

18 REBUTTAL ARGUMENT OF STEPHANOS BIBAS

19 ON BEHALF OF THE PETITIONER

20 MR. BIBAS: Thank you, Your Honor.

21 Five points. First, Justice Sotomayor was

22 entirely right that Holmberg, Russell, Mack, and Merck,

23 just four years ago, make this settled law. There is a

24 reason Justice Kagan says that we can't see laches in

25 cases like this.

56 Alderson Reporting Company Official

1 We don't see it foreclosing ongoing and

2 future wrongs. We've never seen laches used to measure

3 the delay before the wrong occurred to foreclose ongoing

4 and future claims. Laches is normally about the delay

5 between the wrong and the suit.

6 And this invented category of rolling

7 statutes of limitations ­­ this Court in Klehr carefully

8 distinguished separately accruing discrete wrongs within

9 a limitations period from continuing violations that

10 reach back beyond the limitations period to claim

11 damages beyond that.

12 When my friend says we could have brought

13 this exact same suit in 1991, he is absolutely

14 incorrect. If they had stopped infringing in 2005, the

15 entire statutory penalty for my client would have been

16 no recovery from 1991 until 2005.

17 Second, the only two precedents my friend

18 can rely upon from this court, in the face of a wall of

19 precedent noted by Justice Sotomayor, are Morgan and Bay

20 Area Laundry. Bay Area Laundry had a statutory

21 provision, 29 USC 1399(b)(1), that required an employer

22 to bring claims as soon as practical.

23 The only context in which there was an aside

24 in that case, not even an application or holding, was

25 saying that as soon as practical is a laches­like

57 Alderson Reporting Company Official

1 doctrine.

2 The only case that looks remotely close that

3 my friend cites in his brief is the Morgan case. And

4 Morgan is completely distinguishable for two reasons.

5 The first is Morgan involved bootstrapping damages from

6 beyond the limitations period, claiming damages from

7 before the 180 or 300­day filing period. We claim no

8 damages before 2006.

9 Second, my friend is absolutely incorrect in

10 saying there was a statute of limitations in Morgan.

11 Title 7 contains no statute of limitations. It contains

12 a filing timeliness requirement. One of the pillars of

13 this Court's decision in Morgan is you can reach back

14 for damages for two years, as shown by the back pay

15 provision.

16 Since we don't have a limit on damages, we

17 might possibly consider a limit ­­ a laches­like

18 limitation in a future case. That was not the holding.

19 It was not briefed and argued, but there was a mention

20 of it, so Morgan was not within the statute of

21 limitations. There was no statute of limitations.

22 And when this Court interpreted it in

23 Ledbetter, it understood Morgan is about continuing

24 violations rescuing untimely claims for untimely damages

25 before limitations period.

58 Alderson Reporting Company Official

1 The lower courts my friend refers to, by the

2 way, he and I have jointly not found a single case that

3 was entirely barred in the Second, Sixth, Tenth, or

4 Eleventh Circuits.

5 In the cases that adopt a ­­ the circuits

6 that adopt a rare case standard, in theory, leaving the

7 door open, they have not cited and we have not found in

8 the Sixth, Tenth, or Eleventh Circuit a single case that

9 found that standard met as to damages or injunctive

10 relief.

11 And, yes, we do claim damages. Our

12 complaint, Joint Appendix 30 claims damages. Joint

13 Appendix 34, the prayer for relief is phrased in terms

14 of damages, not an accounting for profits.

15 Third, Justice ­­ oh, and by the way, the

16 Posner opinion that was cited said that's only because

17 there's no statutory limitations period. There's no

18 congressional separation of powers problem because,

19 under the statute interpreted in that Posner opinion,

20 there was no statutory limitation period by Congress.

21 Third, Justice Kennedy's point about

22 estoppel as a cousin. It is not a twin. First, you can

23 have an estoppel after a one­week delay. Estoppel has

24 no element requiring delay. Laches requires a long

25 delay.

59 Alderson Reporting Company Official

1 Estoppel requires affirmative, intentional

2 misconduct causing a loss. I'd point out those elements

3 are substantially more stringent. Moreover, estoppel,

4 like tolling and discovery rule, were settled law as of

5 1957. Tolling and discovery rule were cited in the

6 legislative history by the legal advisor to the

7 Copyright Office.

8 But the Holmberg case that was cited to that

9 court said very different rule is the background rule as

10 to laches, no laches within the congressional law

11 period.

12 Finally, let me point out that, because

13 estoppel was settled, it remains available to catch the

14 worst cases of prejudice. It remains available for the

15 manipulative scenarios outlined by my friend.

16 Fourth point, uncertainty. I think it's

17 quite salient that Justice Kagan pointed out that, if we

18 were to recognize laches here, for the first time ­­ for

19 the first time within the congressional statute of

20 limitations, we'd open a whole new field of litigation

21 over laches.

22 When do I file? This Court, just a week

23 ago, in the Ray Haluch Gravel opinion said timeliness

24 rules need to be clearer, simple, predictable. Parties

25 need to know when to file.

60 Alderson Reporting Company Official

1 We frequently see plaintiffs filing on or

2 shortly before the day the limitation period expires.

3 If this Court were to cloud that, then there'd be a rush

4 of preemptive litigation coming into court.

5 Moreover, I think Justice Breyer's point is

6 quite right. You shouldn't have to file 15 damages

7 suits, one after another. From Blackstone to Story to

8 the Marshall Court, one of the principles of equity was

9 you don't have to keep filing injunctive relief.

10 Thank you.

11 CHIEF JUSTICE ROBERTS: Thank you, counsel.

12 The case is submitted.

13 (Whereupon, at 12:08 p.m., the case in the

14 above­entitled matter was submitted.)

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Alderson Reporting Company Official Page 66

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Alderson Reporting Company Official Page 67 inferences 15:3,4 investment 33:10 34:18 36:3,10,16 53:17 54:11 55:2 9:16,19 10:8 11:4 infringe 12:25 33:14 35:15 37:22 38:5,10,13 60:25 15:12 18:3,12 16:13,15 involved 28:21 39:11 40:8 41:10 knowledge 6:22 19:1,11,14,25 infringement 3:14 32:24,25 58:5 41:21 42:13,14,19 37:18 53:10,11 20:13,14,20 24:10 12:24 16:8 17:6 involves 24:12,14 42:20,21,23 43:7 known 50:5 25:1 27:13,14,16 22:4,21 25:13 irrefutable 39:10 44:1,20,24 45:12 27:22 28:3,12,24 54:17,18,24,25 irrelevant 40:17,19 46:1,2 47:6,21 L 43:11,14,16,19 55:15 irwin 43:23 48:3,5,7,12,17,20 laches 3:11,13,20 44:2,7,11,23 45:8 infringing 17:18 isnt 7:5 10:5 24:5,7 48:23 49:22 50:15 4:16,16,20 5:23 45:10 46:23 47:1 57:14 54:19 50:19,20 51:14,19 6:14 7:5,25 8:16 49:21 56:23 60:4 initial 39:19,25 issue 5:15 12:14 52:3,11,19,19 8:19,22 9:7 10:12 60:10 52:24 49:4,5 50:14 53:18 54:5,9 55:1 12:20 14:10 15:15 lawequity 27:11 injunction 12:13 issues 5:20 55:16,23 56:8,14 17:2,5,9,20 18:11 47:3 20:14,15,21 21:9 ive 28:12 56:16,21,24 57:19 19:9,10,23,24 lawsuit 22:18 36:23 21:12 22:2,24,24 59:15,21 60:17 20:2 21:2,9 24:3,5 41:14 23:12 25:21 26:5 J 61:5,11 24:7,9,12,20,23 lead 49:18 26:6 44:15 48:10 january 1:9 33:13 justices 13:6 25:2,10,22,24,25 leading 32:11 48:12 50:3,10 33:14 justification 10:6 27:7,22 28:14,19 leads 49:19 injunctions 22:5 joint 59:12,12 28:22,23 29:5,8 learned 51:8 49:24 50:2 51:23 jointly 59:2 K 29:14 30:11,17,25 leave 20:15 54:21 55:2 judge 46:20 51:8 kagan 13:24 17:16 31:10,20,22 32:6 leaves 29:21 injunctive 3:23 judges 21:4 18:5 31:15 32:10 32:12 37:19 38:1 leaving 59:6 11:7,15,23 12:5 judgment 16:14 37:22 38:5,10,13 38:2,16 39:22,25 led 48:25 49:1 12:12 13:11,21 34:19 39:9 40:18 39:11 40:8 45:12 40:22 41:6 42:15 ledbetter 6:16 7:3 17:23,23 22:23 judicial 5:18,19 50:20 52:3 56:24 43:1,1,2,14 44:21 58:23 26:1,3 34:8 53:8 35:24 60:17 45:2,10,13,25 legal 18:1,11 20:15 59:9 61:9 juries 25:15 kagans 52:20 46:22 47:13,14,24 21:11,20,21 22:11 instances 14:11 jurisdiction 47:3 keel 53:15 48:2,8,10,23 49:2 25:11 41:5 45:3,8 19:1,23 jurisprudence keep 14:25 36:13 50:17,23 51:3,22 46:9 60:6 instructions 15:5 46:19 61:9 52:10 53:3 54:5 legislative 29:20 instruments 43:24 justice 1:18 3:3,9 kennedy 24:1,16 56:5,12,24 57:2,4 60:6 44:4 4:3,10,22 5:7,24 30:13 46:1 47:6 59:24 60:10,10,18 legitimate 16:12 intellectual 25:23 6:8 7:7,23 8:2,6 48:20,23 60:21 length 27:10 intentional 60:1 8:21 10:3,15,16 kennedys 59:21 lacheslike 57:25 lengthy 14:4 interest 12:20 33:2 11:12 12:23 13:24 key 37:1 53:14 58:17 lest 3:25 35:20 47:7 15:17 16:18,23 kind 12:2 32:4 lamotta 37:1,4 letter 34:23 interpret 7:14,17 17:16,22 18:5,16 39:13 45:22 language 8:4,6 level 11:9 interpretation 35:2 18:25 19:6,13,18 kinds 51:11 18:14 28:9 31:18 liability 54:23 interpreted 58:22 20:1 21:5,8 22:2,7 klehr 57:7 37:23 40:16 license 4:1 11:16 59:19 22:10 23:9,16,18 knew 31:25 laserdisc 55:13 lied 35:25 interpreting 7:19 24:1,16 25:18 know 6:8 8:9 9:14 late 11:5 37:9 53:9 life 37:5 7:20 8:19 26:25 27:4,25 11:14 20:13 29:25 laughter 42:24 limit 32:7 52:20 interprets 7:22 28:8,11,20 29:3,5 38:11 39:15 40:21 laundry 15:8 45:6 58:16,17 intertwined 7:19 29:9,18 30:12 40:25 41:3 43:8 52:7 57:20,20 limitation 5:5 20:4 invented 57:6 31:15 32:10,15,21 47:25 48:18 49:4 law 5:6,7,8,8,11 26:13 58:18 59:20 invest 15:18 16:2 33:9,20,23 34:5 49:21 50:14 53:14 8:17,23 9:1,3,14 61:2

Alderson Reporting Company Official Page 68 limitations 3:12,22 lot 33:24 55:4 54:14 necessity 40:11 once 21:8,11 39:24 4:4,6,9,13,21,23 lots 34:22 middle 13:18 need 60:24,25 oneida 10:11 25:5 5:22 6:15 7:6,9,15 lower 59:1 mind 18:17,17 negative 4:6 ones 7:8 8:13 7:16,22 8:19 19:15,19 20:21 negotiations 16:15 oneweek 59:23 10:13 14:3,8,10 M 22:14 net 34:3 ongoing 3:25 54:17 14:13 17:7,12 m 1:13 3:2 61:13 mine 32:25 33:2,6 never 3:11 8:19 57:1,3 18:12,19 19:20 maba 45:6 35:14 50:6,6 19:19 34:4 35:16 open 7:3 51:1,3 26:10 28:16,18,22 mack 10:10 18:10 mineral 50:1 35:16,17 40:24 59:7 60:20 29:14 30:7,24 25:4 28:9 56:22 minutes 56:17 41:24 44:7 57:2 opinion 38:11 31:23 32:1,23 maintained 6:1,5 misconduct 60:2 new 8:25 9:3 22:22 40:17 51:9 52:21 37:25 39:14 40:2 making 20:17 misrepresentation 48:10 53:5 56:11 59:16,19 60:23 45:10,20 50:25 31:17 34:2 55:7 24:6,7 56:13 60:20 opposed 18:24 52:6,8,13,14,25 manipulative 60:15 missing 15:4 nicole 1:17 2:6 25:11 26:22 56:13 53:4 54:7 57:7,9 mansfield 38:14 modern 44:7 16:20 option 10:19 57:10 58:6,10,11 mark 1:21 2:10 modified 26:5 night 37:10 oral 1:11 2:2,5,9 58:21,21,25 59:17 27:2 modify 9:24 ninth 37:22 38:18 3:7 16:20 27:2 60:20 marshall 61:8 monetary 26:1,3,5 39:5 40:16,24 order 7:14 13:1 limited 10:1 21:22 matter 1:11 5:18 money 12:24 15:19 47:18,22 48:15,17 14:6 45:12 49:10 21:1 44:20 55:17 16:2,3 20:9,17,22 50:13 54:3 ordinary 52:12 limits 9:25 61:14 34:1 55:4 nontimeliness 5:21 originated 8:21,23 list 43:4 maxim 46:18 moneylosing 42:4 normally 20:3 57:4 ought 9:17 10:7 listed 31:7,11 44:9 maximize 14:6 morgan 6:21 7:2 noted 57:19 13:11 litigants 56:6 mclean 50:2 54:22 28:21 45:5,21 notes 40:5 outcomes 49:23 litigated 35:7 mean 7:7 8:3 11:17 52:7 55:19 57:19 notice 16:11 outer 32:6 litigation 49:1,15 14:8 15:21 20:20 58:3,4,5,10,13,20 number 32:7 outlined 60:15 49:18 60:20 61:4 31:16,17 43:7 58:23 numerous 18:14 outset 17:4 little 31:16 55:2 mortgage 15:8 outside 37:25 39:14 liver 50:2 meaning 29:10 mortgagee 15:9,11 O 46:12 long 6:24 8:18 means 9:13 38:21 mortgagor 15:18 o 2:1 3:1 overrule 23:10 19:10,13 20:8,16 meant 39:6 mother 36:1 37:9 oath 37:12 owner 20:23 22:16 25:2 37:16 41:17 measure 57:2 37:12 objective 41:11 41:17 42:17,20 mechanical 25:15 motions 51:4 obligations 31:2 P 59:24 memory 40:7 mount 41:14 obviously 8:7 p 3:1 61:13 longer 47:5 menendez 54:23 move 29:15 39:24 occupied 4:18 page 2:2 look 12:15 13:17 mention 58:19 moved 12:4 occurance 6:22 paid 20:23 14:14 19:6 22:12 mentioned 22:1 movie 20:8,17 occurred 6:6 37:24 part 9:15 20:16 25:10 29:18 33:19 merck 10:11 25:5 22:14 57:3 30:18 33:2 37:24 38:11 56:22 mustnt 12:15 offense 21:18 38:2 42:6 46:2 looked 28:12,13 merge 28:4 office 60:7 participation 36:19 34:11 44:6 47:1 merger 47:5 N offset 33:11,17 particular 5:25 52:5 merits 40:21 n 2:1,1 3:1 oh 20:13,19 59:15 10:19 21:19 41:8 looks 27:17 58:2 met 59:9 nature 30:25 50:3 okay 21:17 25:21 55:4 loosely 5:3 metrogoldwynm... naught 35:17 33:7 50:19 54:10 particularly 50:5 lose 40:7 42:16 1:6 3:5 necessarily 13:9 56:6 54:17 loss 60:2 mexicano 9:25 necessary 29:14 old 33:17 35:22 parties 31:2 60:24 lost 29:3 mgm 15:19 36:18 47:4,5 46:23 47:3 partly 39:11,12

Alderson Reporting Company Official Page 69 party 35:1 51:6,16,21 52:17 point 4:4 6:20 10:9 predictive 27:19 34:4 pass 37:18 52:22 54:8,13 13:5 15:6,14 predilection 51:25 profitable 41:25 passed 36:2 37:7 55:9,25 56:9 23:18 26:18 29:12 preebay 51:24 profits 15:1 16:5,8 patent 25:23 26:3,8 person 17:18 25:12 30:21 31:14 32:13 preemptive 49:14 21:25 23:11,15,22 26:14,15,17 46:13 25:13 36:12 33:25 34:6 35:13 61:4 23:23 33:11,14,24 51:15,17 personal 56:5 35:19 42:9 46:24 preerie 5:9 34:16 35:15 41:13 patterson 32:11,12 persuasion 39:2,12 59:21 60:2,12,16 prejudice 10:24 41:24 44:15 59:14 32:13,20 35:14 petition 50:14 61:5 12:18,19 35:22 properly 41:3 50:7 53:1,2 petitioner 1:4,16 pointed 60:17 37:19,21 38:2 property 3:24 paula 1:3 37:8 1:20 2:4,8,14 3:8 points 56:21 39:10 40:6 53:24 10:25 11:6,8 13:7 pay 16:3 23:4,13 16:22 17:3 24:3 police 45:11 53:24,25 60:14 25:24 32:24,24 34:9 58:14 29:1 40:23 49:18 policed 52:10 prejudicial 39:15 proposed 49:18 payment 11:19 50:11 53:10 56:19 policy 11:2 12:2 premise 10:16 protect 3:24 47:8 payments 15:10,11 petitioners 3:17,24 26:22 12:11 protection 26:14 penalty 57:15 41:1 47:11 49:2 pomeroy 25:6 prepare 56:11 29:14 pennsylvania 1:15 49:10 position 4:11 11:18 presented 27:8 protest 16:12 penny 22:15,16,17 petrella 1:3 3:4 12:13 14:19 19:4 preserved 41:3 provision 5:25 9:18 people 15:24 50:22 33:5 37:8 40:16 21:15 25:20 26:4 presumably 13:1 41:23 57:21 58:15 51:3 petrellas 37:9 34:7 39:13 42:14 presume 37:25 provisions 6:2 12:8 percent 47:17 49:3 philadelphia 1:15 43:2 56:12 presumption 37:23 public 12:19 percipient 37:17 philosophical posner 46:20 59:16 38:6,8,16,22,23 published 53:7 peril 16:15 44:20 59:19 39:7,22 40:15,25 punitive 28:25 period 4:6,23 5:5 phrased 59:13 possession 11:21 presumptions 39:6 purely 4:14 5:22 6:18 7:3,16 pick 18:13 33:13,19 12:9 presumptively 13:9 purposes 27:13 7:21 20:4 23:11 49:22 possibly 41:15 13:10 40:1,2 47:2 26:9,12,13,14,15 pill 50:2 58:17 pretty 30:7 46:21 pursuant 36:19 26:16 31:23 37:25 pillars 58:12 postmerger 18:4 prevent 32:3 pursue 30:16 39:14,20 41:13 place 18:20 21:3 potential 49:11 prevented 9:11 put 11:25 18:20 45:15 50:25 53:19 39:7 52:9 principle 4:15 23:4 37:11 40:15 55:4,7 57:9,10 plaintiff 12:19 14:4 power 31:1 34:8 17:11 26:21 30:7 41:22 53:7 58:6,7,25 59:17 14:15 22:4 23:5 43:16 30:8 42:16 puzzle 25:19 59:20 60:11 61:2 24:15 25:13 28:24 powers 28:4 31:2 principles 17:10 periods 4:21 6:15 30:16,19 33:1 59:18 25:10 29:24 30:4 Q 7:15 8:18 34:17 38:17,25 practical 21:18 61:8 question 5:20 9:10 perry 1:21 2:10 41:14,15,16,19 57:22,25 prior 6:22 19:3 16:25 17:2 18:20 27:1,2,4 28:10,20 42:12,17 50:24 practice 21:16 priority 34:14 21:6 22:8 27:8 29:4,7,11 32:10 53:11 22:13 43:22 probably 36:14 32:22 35:5 37:15 32:17 33:12,22 plaintiffs 15:4 16:9 prayer 44:14 59:13 50:22 41:6,6,7 43:11 34:3,10,21 36:8 38:1 61:1 precedent 57:19 problem 11:13 44:17 46:2,8,11 36:16 37:22 38:4 play 45:25 precedents 31:20 59:18 48:5,16,21 49:22 38:7,13 39:17 please 3:10 16:24 57:17 procedure 8:25 9:3 52:4,6 53:23 40:13 41:10,21 27:5 precisely 21:10 proceed 15:24 54:16 42:18,21,25 43:18 plenty 15:6 precision 43:24 30:19 questioned 16:1 44:3 45:4,16 46:6 plethora 48:25 44:4 produce 22:14 quite 8:10 60:17 47:12 48:3,9,14 plus 20:3 30:25 predictable 3:22 production 38:25 61:6 48:19,22 50:17,20 47:17 11:1 60:24 profit 22:17 33:4 quo 48:24,24 49:7

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Alderson Reporting Company Official Page 71 scope 13:20 shouldn 41:15 57:19 57:20 59:17,20 sundays 7:22 scotfree 4:5 shouldnt 10:19 sought 44:14 stay 41:18 supervisor 55:20 screenplay 37:2,5 11:21,25 61:6 sounds 8:6 stephanos 1:15 2:3 supplementary 37:13 55:11 show 20:2,2 source 27:18,19 2:13 3:7 56:18 45:17 search 44:24,24 showed 34:25 specific 19:9 21:6 steps 28:21 51:7 support 29:10 second 3:20 4:4 shown 22:21 58:14 specifically 30:1 stopped 57:14 31:13 8:16 17:15 23:17 shows 25:12,13 specifies 21:19 story 61:7 supporting 1:19 25:9 43:20 46:2 side 4:12 11:22 spent 22:16 33:7 strategic 35:11 2:8 16:22 47:18,22 48:9 40:12 splitting 23:6 53:13 suppose 24:16 52:3 53:5 56:7,10 sidelines 35:19 spoke 38:8 39:5 strictly 6:13 supreme 1:1,12 57:17 58:9 59:3 sides 30:10 42:11 spoken 5:15 strikes 14:7 46:4 section 9:23 27:12 silence 5:17 squarely 32:20 stringent 60:3 sure 24:19 48:9 27:13 simple 11:1 41:5 stage 40:18 strong 31:16 51:12 see 5:24 11:12 14:8 60:24 standard 15:8 structural 45:22 surprising 20:1 15:15 41:20 56:24 simply 4:6 24:4 40:21 59:6,9 studios 42:10 49:11 surveyed 28:6 57:1 61:1 47:8 started 4:24 17:19 56:1,10,10 susceptible 23:21 seeing 51:4 single 59:2,8 starting 39:13 55:6 stuff 54:19 system 35:25 42:7 seeking 36:24 sit 25:19 starts 16:3 39:25 subject 24:2 44:19 seeks 44:18 53:17 sitting 9:14 13:16 state 5:3,5 8:16 52:15 T seen 57:2 24:12,16 35:18 32:23 submit 27:8 38:18 t 2:1,1 4:24 41:15 senate 30:1 situation 15:22 statement 23:10 submitted 61:12,14 table 13:11 54:11 sense 17:19 21:2 17:16 22:2,25 states 1:1,12,19 2:7 subsequent 46:10 tailor 13:20 25:9 39:18 46:23 53:13 16:21 substantial 15:18 take 4:3 7:23 12:4 51:2 situations 15:7 statue 34:12 16:2 12:13 14:12 15:7 sent 34:21 53:18 status 48:24,24 substantially 60:3 15:8 26:18 31:16 separate 3:15 14:2 sixth 39:23 47:22 49:7 substantive 9:4,7 42:13 56:12 14:16 17:17 59:3,8 statute 3:12,21 4:4 9:24 10:4 taken 24:10 separated 45:24 sixyear 52:13 4:5,8,12 5:16 7:6 subtract 23:24 talked 35:21 46:3 separately 57:8 skim 33:18 7:8,22 14:8,10,12 sue 17:18 23:10 talking 8:3,4 12:2 separation 59:18 sold 42:5 17:7,12 18:12,19 34:1 35:3 41:12 15:23 sequel 56:11 solicitor 1:17 19:3,19,20 20:5 41:17 52:14 task 36:24 sequence 54:15 somebody 29:20 21:18 26:10 28:1 sued 4:7 33:13 36:5 teamsters 46:17 series 34:24 32:3 33:3 56:1 28:15,18,21 29:13 37:11 52:16 53:11 television 55:13 set 32:6 songs 42:4 30:1,23 31:18,22 suggesting 35:2 tell 12:3 35:24 settled 56:23 60:4 soon 57:22,25 32:22,23 40:1 suggests 39:12,12 42:14 46:1 60:13 sooner 52:16 45:9,20,23 50:24 suing 32:3 temporally 45:23 settlement 16:14 sorry 29:4 32:17,18 52:8,13,14,25 suit 14:5,6,13,20 ten 38:15 seventh 45:7 46:18 sort 11:13 53:4,16,21 54:7 15:2,7,20 16:4 tenth 47:22 59:3,8 share 33:4,6 52:19 sotomayor 10:15 58:10,11,20,21 17:1,3 30:5 41:18 term 18:11 52:24 shelves 53:8 11:12 12:23 28:8 59:19 60:19 48:1,1,13 50:18 terms 11:23 14:4 shes 33:16 35:12 28:11,20 29:3,5,9 statutes 10:13 14:3 50:24 53:3,16 21:15,17 26:9 short 7:4 29:18 32:21 33:9 32:1 52:6,21 57:7 55:5 57:5,13 59:13 shorten 10:13 33:20,23 34:5,18 statutory 10:23 suits 47:8 49:2,14 test 12:16,17 shortening 8:13 36:3,10,16 47:21 18:18,23 21:22 61:7 testified 36:1 shorter 26:13,13 48:3,7,12,17 25:14 31:17 34:12 summary 39:8 testify 37:3 shortly 61:2 49:22 55:23 56:21 41:22 51:2 57:15 40:18 text 4:15 17:14

Alderson Reporting Company Official Page 72 textual 6:13 14:21 16:4 21:23 troubles 8:24 50:20 uniqueness 20:5,7 want 20:16 30:2,15 thank 16:18 26:24 22:18 33:17,19 true 29:1,16 33:9 united 1:1,12,19 39:15 43:12 26:25 32:19 42:21 35:6,6,8 40:9 47:21 2:7 16:21 wants 11:1 33:18 56:9,16,20 61:10 43:19 54:11 trying 22:9,19 unjust 21:25 33:18 36:21 61:11 threeyear 39:20 35:24 unreasonable 20:2 washington 1:8,18 thats 4:20 6:7,12,15 55:7 tuesday 1:9 20:4 41:19 1:21 12:2 13:5,22 14:1 threshold 12:21 turns 37:21 unreasonably wasnt 5:5 29:11,12 14:10 15:21 18:1 till 20:10 twice 52:5 42:17 water 50:1 20:1,8 22:19 time 14:5 16:16 twin 59:22 untimely 58:24,24 way 4:24 5:25 7:7 24:10 27:8,22 18:4 26:9,12,15 twinned 30:24 unusual 53:20 14:16 15:19 23:22 28:23,26 30:7 30:25 31:19 41:1 twins 30:13 upend 15:12 28:1 40:23 43:9 36:14,22 38:10,11 41:17 42:17,20 two 13:15 17:7 usc 57:21 44:12 49:9 59:2 39:6 41:16,21 46:5 47:1 49:8 20:25,25 23:14 use 3:17 4:25 11:20 59:15 43:3,11 50:10 52:5 60:18,19 25:1 28:21 30:10 15:3 ways 29:17 51:12 52:17 59:16 timeliness 3:23 34:10 40:3,10 useful 45:19 wed 60:20 theory 59:6 4:17,18 5:15,20 41:8 46:3 51:6 uses 12:20,22 week 60:22 thered 61:3 5:22 7:4,11 37:20 56:5 57:17 58:4 usually 14:8 wellestablished theres 4:12 5:19,20 58:12 60:23 58:14 18:2 47:10 15:10,20,21 23:15 timely 3:16 7:1 twoyear 55:4 V went 30:5,9 25:19 26:12 28:15 times 10:2 28:23 type 26:19 38:22 v 1:5 3:4 5:12 30:21 weve 17:13 28:14 28:17 39:18,21 29:8,13 52:7,9 typing 37:10,12 38:14 42:11 57:2 45:14,14 48:5 title 6:2 35:7 58:11 valid 15:21 whats 33:20 35:7 51:10,22 55:15 today 17:14 U valuable 42:3 whatsoever 31:13 59:17,17 toehold 8:16 unavailable 24:21 value 14:23 55:19 theyre 14:23 told 11:25 24:3 35:23 37:3 vary 5:4 whos 22:17 thing 21:11 22:11 33:25 uncertainty 60:16 version 28:2,26 willful 54:17,24 43:23 toll 45:7 unclean 27:21 55:3 win 30:8 things 24:14 29:1 tolling 7:12,13,15 43:24 44:3,22 versus 22:22 42:12 witness 15:5 36:11 32:7 41:18 7:24 8:1,17,22 9:2 underlying 28:15 vhs 55:13 37:2 53:14,15 think 9:10,17 10:21 9:5,18,18 17:9 28:18 29:16 vickie 37:4 witnesses 35:23 14:11,18 21:1,14 18:6 19:14 30:11 understand 21:5,15 view 17:5,21 37:16,17 40:7 22:20 23:8,20 30:25 31:5 43:23 23:16 24:8 34:18 viewed 45:7 wont 20:3 26:17 33:15 38:7 44:21 60:4,5 understanding vindicate 11:8 word 7:19 39:17 40:9 41:9 traded 42:5 5:10 6:14 7:2 violation 6:17 worded 5:25 43:10 49:17 50:14 trademark 11:4 38:11 45:14 wording 4:8 50:21 51:12,16,17 46:10 54:23,24,24 understands 7:13 violations 3:25 6:19 words 7:24 8:15 51:19 52:11 53:13 traditional 12:15 understood 5:4,13 57:9 58:24 9:22 20:5 21:5 54:13 60:16 61:5 traditionally 44:8 50:5 51:8 58:23 work 14:16 23:4 W thinking 9:14 transfers 12:9 undertaking 26:20 35:18 55:12,24 31:19 travel 30:12 underwent 26:19 wait 14:15 41:12 56:2,11,13,15 third 3:22 43:22 traveled 45:18 undisputed 39:9 42:17 53:15 54:10 works 14:17,22 59:15,21 treated 43:9 41:9 49:16 waited 33:3 37:16 41:24 thought 9:17 13:25 treatise 25:6 unfair 14:12 30:16 42:19 world 36:17 40:4 17:23 32:1 42:23 trial 35:8 30:18 waits 15:1,9 35:11 56:4 47:23 50:23 tried 40:17 unique 17:16 20:5 waiver 31:6 44:22 worst 60:14 three 6:10,11 14:21 trigger 37:21 25:2 54:15 wall 57:18 worth 14:22 15:10

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